Dear Taxpayers,
GSTN has prepared an informative resource in the form of an e-invoice glossary and a step-by-step guide for your reference.
You can access and download the PDF document by clicking on the link below:
https://tutorial.gst.gov.in/downloads/news/glossary_on_e_invoicing_v1_1.pdf
https://tutorial.gst.gov.in/downloads/news/e_invoice_overview.pdf
E-invoice mandate may cover B2C transactions
The Goods and Services Tax (GST) Council, in its forthcoming meeting on Monday, is expected to discuss extending the e-invoicing mandate to cover business-to-consumer (B2C) transactions.
Currently, e-invoicing is compulsory for businesses with a turnover of Rs 5 crore and above, but only for their business-to-business (B2B) transactions.
“A pilot project may be proposed to introduce voluntary e-invoicing in selected sectors, in collaboration with states willing to participate,” a government official familiar with the plan told Business Standard.
The move aims to curb tax evasion and enhance compliance in consumer transactions.
The GST Council’s law committee is learnt to be working on bringing enabling provisions in the GST law.
Upon approval, the GST Network (GSTN) will need to be upgraded to accommodate this change, including the development and finalisation of the required commercial model.
The pilot programme is expected to provide the tax department with insights into the feasibility and potential impact of implementing B2C e-invoicing within the Indian context.
According to sources, the tax department believes that extending e-invoicing to B2C transactions could yield multiple benefits for taxpayers, consumers, and tax administrators alike.
Among the anticipated advantages are environmental sustainability, through reduced paper usage, and lower transaction costs, which would enhance cost efficiency for businesses.
Additionally, consumers would be able to verify the authenticity of their bills relatively easily, besides paving the way for GST refunds for foreign tourists in the future.
Once the Council approves the plan, the threshold for mandatory e-invoicing may be examined in line with the criteria for B2B transactions.
However, any such adjustment would likely occur later, as the initial phase will be voluntary, another official explained.
The implementation of e-invoicing for B2B transactions had been progressively rolled out under the GST law.
In October 2020, businesses with a turnover exceeding Rs 500 crore were first mandated to issue e-invoices.
This requirement was later extended to companies with turnover above Rs 100 crore from January 1, 2021. By April 1, 2021, the threshold was reduced to Rs 50 crore, and further lowered to Rs 20 crore a year later.
On October 1, 2022, businesses with turnover above Rs 10 crore were also brought under the e-invoicing regime. Most recently, from August 1, 2023, the threshold was set at Rs 5 crore.
Despite this phased implementation, challenges remain, particularly for businesses with turnovers between Rs 5-10 crore, according to officials.
Tax authorities have reportedly been urging non-compliant businesses to meet the e-invoicing requirements.
As of the latest update from the GST E-invoice system on December 04, 2023, it has been mandated that a minimum of 6 digits of the HSN code will be compulsory in e-Invoices for taxpayers with an Aggregate Annual Turnover (AATO) of 5 Crore and above. This requirement will come into effect from December 15, 2023.
Source from: https://einvoice1.gst.gov.in/
CBIC clarified that,
1. We would like to inform you that GSTN has onboarded four new IRPs (Invoice Reporting Portals) for reporting e-invoices in addition to NIC-IRP. As a result, the beta launch of a new e-Invoice portal (www.einvoice.gst.gov.in), has been done where taxpayers can find comprehensive information on e-invoice compliance in a user-friendly format, such as check your enablement status, self-enable themselves for invoicing, search for IRNs, web links to all IRP portals – all the relevant links/information in one convenient location. Taxpayers can log in to the new e-invoice portal using their GSTN credentials for select services pertaining to their GSTIN profiles.
2. Taxpayers may note that the portal <einvoice.gst.gov.in> is reference site for all masters (data), news and updates, latest releases etc. For registering e-invoices and to access APIs, you still need to go to <einvoiceX.gst.gov.in> sites. The urls of IRPs sites authorised to generate IRNs as on date are as follows:
| URL | URL Activation Status |
| <einvoice1.gst.gov.in> | Active |
| <einvoice3.gst.gov.in> | Shall be available soon |
| <einvoice4.gst.gov.in> | |
| <einvoice6.gst.gov.in> |
Also, at the helpdesk for e-invoice issues, for supporting the taxpayers vis-a-vis IRP issues is available at our Grievance Redressal Portal <selfservice.gstsystem.in> where the relevant IRP can be selected using the dropdown created for each of the private IRP.
3. Please note that taxpayers can continue to report e-invoices on the NIC IRP portal <einvoice1.gst.gov.in> as previously.
4. GSTN is committed to making your compliance journey as smooth as possible. If you have any questions or concerns, please do not hesitate to contact us.
3. Advisory on Geocoding of Address of Principal Place of Business:
2. This functionality can be accessed under the Services/Registration tab in the FO portal. The system-generated geocoded address will be displayed, and taxpayers can either accept it or update it as per their requirements of their case. In cases where the system-generated geocoded address is unavailable, a blank will be displayed, and taxpayers can directly update the geocoded address.
3. The geocoded address details will be saved separately under the “Principal Geocoded” tab on the portal. They can be viewed under My profile>>Place of Business tab under the heading “Principal Geocoded” after logging into the portal. It will not change your existing addresses.
4. The geocoding link will not be visible on the portal once the geocoding details are submitted by the taxpayer. This is a one-time activity, and once submitted, revision in the address is not allowed and the functionality will not be visible to the taxpayers who have already geocoded their address through new registration or core amendment. GSTN emphasizes once again that the address appearing on the registration certificate can be changed only through core amendment process. This geocoding functionality would not impact the previously saved address record.
5. This functionality is available for normal, composition, SEZ units, SEZ developers, ISD, and casual taxpayers who are active, cancelled, and suspended. It will gradually be opened for other types of taxpayers.
6. GSTN would like to also inform you that this functionality is currently being made available for taxpayers registered in Delhi and Haryana only, and it will gradually be opened for taxpayers from other States and UTs.
4. Regular taxpayers can opt for Composition Scheme
For Financial Year 2023-24 by navigating as ‘Services-> Registration-> Application to Opt for composition Levy’ and filing Form CMP-02. This facility is available on GST Portal till 31st March, 2023.
5. GST portal to show details of State and Center jurisdiction in the status of ARN:
Now, the GST portal in the status of Application Reference Number (“ARN”), will also show the details of State and Center jurisdiction, to help taxpayers to track the application status of Form GST REG – 01 [Application of New Registration] or Form GST REG – 04 [Clarification/additional information/document for (Registration/Amendment/ Cancellation)] filed by them.
The Department of Commerce under the Ministry of Commerce and Industry vide Notification F. No. K-43013(12)/1/2022-SEZ dated February 23, 2023 has issued the Special Economic Zones (Amendment) Rules, 2023, in order to insert new in the Special Economic Zones Rules, 2006 (“the SEZ Rules”), w.r.t. SEZ units undertaking/ dealing with aircraft leasing activities, in a following manner:
Newly inserted Rule 21B of the reads as below:
“21B. Units dealing with aircraft leasing activities. – A Unit in an International Financial Services Centre, authorised to undertake aircraft leasing activity, if allowed by the International Financial Services Centre Authority not to maintain separate office, may utilise office space or manpower or both, of another unit set up in International Financial Services Centre authorised to undertake aircraft leasing activity, as may be approved by the Authority.”
7. AAR & Judicial Decisions:
(i) Hon’ble Highcourt Decision Regarding rectification of GSTR-1 after expiry of limitation period:
(Applicant – M/s. Y. B. CONSTRUCTIONS PVT. LTD)
The Petitioner before this Court seeks a direction to the Opposite Parties to permit the Petitioner to rectify the GST Return filed for the periods 2017-18 and 2018-19 in Form-B2B instead of B2C as was wrongly filed under GSTR-1 in order to get the Input Tax Credit (ITC) benefit by the principal contractor.
The stand taken by the Opposite Parties is that once the deadline for rectification of the Forms was crossed, then no further indulgence could be granted to the Petitioner.
HELD
• The fact remains that by permitting the Petitioner to rectify the above error, there will be no loss whatsoever caused to the Opposite Parties. It is not as if that there will be any escapement of tax. This is only about the ITC benefit which in any event has to be given to the Petitioner. On the contrary, if it is not permitted, then the Petitioner will unnecessarily be prejudiced.
• A direction is issued to the Opposite Parties to receive it (GSTR-1) manually. Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal.
Disclaimer:
This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.
For all B2B transactions, Selection of PoS State Code as ‘96- Other Country’ is enabled for HSN related to the Services by way of transportation of goods
The list of items should have only the items with HSNs belonging to 9965 and 9968
Some news reports have appeared in media today suggesting that though @GST_Council has recommended reducing threshold for generation of e-invoice to Rs.5 cr wef 1.1.23, the Govt. has yet to issue notification in the matter, giving rise to uncertainties amongst the taxpayers.
It is clarified that presently, e-invoicing has been made mandatory for registered persons having aggregate turnover more than Rs. 10 crore in any preceding financial year from 2017-18 onwards (Refer Notification no. 17/2022-Central Tax dated 01.08.2022).
There is no proposal before the Government, at present, to reduce this threshold limit to Rs 5 Crore with effect from 01.01.2023, as no such recommendation has been made by GST Council as yet.
CBIC_India
Attention: Taxpayers with AATO in excess of Rs 20 Crore are also required to generate e-invoice for their outward supplies w.e.f. 1st April, 2022. Read more
The e-invoicing system now applies to more businesses via the CBIC’s CGST notification 01/2022 dated 24th February 2022. Indian businesses with an annual aggregate turnover of more than Rs.20 crore up to Rs.50 crore, as calculated in any preceding financial year from 2017-18 up to 2021-22, must begin generating e-invoices from 1st April 2022.
The article deep-dives into the details of the notification, preparedness, options, challenges and tested solutions such as Clear e-Invoicing to aid such businesses.
More than 3,000 large enterprises trust e-invoice for their unified e-invoicing, e-way bill and Business-to-Consumer (B2C) QR code compliance.
notifications for the e-invoicing implementation to date-
Notification | Guideline |
Notification 13/2020 on 21st Mar 2020 | e-Invoicing applied to businesses with turnover higher than Rs.100 crore in a year from 1st October 2020. |
Notification 60/2020 on 30th Jul 2020 | A revised e-invoice format was issued with 20 new fields and 13 fields removed. |
Notification 61/2020 on 30th Jul 2020 | The turnover limit was raised from Rs.100 crore to Rs.500 crore to limit its applicability. |
Notification 70/2020 on 30th Sep 2020 | Original notification 13/2020 is amended to change the turnover computation from the current FY to the turnover of any preceding FY from 2017-2018. |
Notification 88/2020 on 10th Nov 2020 | Revision in the original notification 13/2020 to reinstate the turnover limit to Rs.100 crore from Rs.500 crore. |
Notification 05/2021 on 08th Mar 2021 | Change in original notification 13/2020 to reduce the turnover limit to Rs.50 crore from Rs.100 crore to extend the applicability to more taxpayers. |
Notification 23/2021 on 1st June 2021 | Extension of exemption to government departments and local authorities. |
Notification 01/2022 on 24th February 2022 | Change in original notification 13/2020 to further reduce the turnover limit to Rs.20 crore from Rs.50 crore to extend the applicability to more taxpayers. |
As per the Notification No. 01/2022- Central Tax Dated 24.02.2022, e-Invoicing is mandatory for the taxpayers with annual turnover more than Rs.20 crores from 1st April 2022.
The taxpayer can check his eligibility of e-Invoicing by Clicking Here
The taxpayer can go to Help section in e-invoice portal for further details.
Let us tell you that the e-Invoice System is for GST registered person for uploading all the B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice and QR code to the user.
GSTN portal has posted an update that:
Generation of e-invoice is mandatory for certain class of taxpayers, as notified by the Government. These taxpayers are required to prepare & issue their e-invoices by reporting their invoice data in the prescribed format (e-invoice schema in FORM GST INV-01) and reporting the same on the Invoice Registration Portal (IRP). Invoices reported successfully on the IRP are given a unique Invoice Reference Number (IRN). The documents (invoices, debit notes, credit notes) reported on the IRP are then transmitted electronically to the GST system and are auto-populated in the respective tables of GSTR-1.
For a detailed advisory regarding auto-population of e-invoice data into GSTR-1 tables, please click here.
Vide Notification No. 01/2022- Central Tax, Dated 24th February 2022, the CBIC has reduced the applicability of e-invoice.
Now, e-invoice requirements will be applicable to taxpayers whose aggregate turnover above Rs. 20 crore in any of the previous years from 2017-18 till 2021-22.
Copy of Notification attached:
E-way Bill Portal has posted an update that:
This is to inform to all E Way Bill & E Invoice users that downtime of all the E Way Bill & E Invoice operations (for all modes – Web, API, Bulk, Mobile & SMS) is scheduled between 11:00 PM on 2nd October 2021 to 7:00 AM on 3rd October 2021 due to maintenance activity.
Hence all the users are requested to make necessary arrangements to carry out the activities such as E Way Bill generation, updation of Part B, Extensions of E Way Bill , Generation of IRN, Cancellation of IRN, Generation of E Way Bill by IRN etc. before the scheduled downtime so as not to affect the business requirements/processes.
We will be extending the upper time limit for extension of the E Way Bills that are going to expire on mid night of 2nd October 2021 till 10:00 AM on 3rd October 2021 temporarily only for that day.
During the scheduled downtime, the E Way Bill & E Invoice systems may be accessible for some time between 01:00 AM and 03:00 AM , during which operations on E Way Bill & E Invoice can be performed but there may be interruptions.
We regret the inconvenience caused due to the unavoidable maintenance work, we seek your cooperation for the same.
Input Tax Credit Frauds: Challenges in 2021
Recently, there have been headlines flashing about the GST frauds, ITC frauds, and many other malpractices.
About INR 700 Crores have been recovered by the Central Board of Indirect Taxes and Customs (CBIC) from the fraudsters with about 215 arrests in January of 2021.
No matter how much transparent the government tries to make the GST structure, leakage points are being found by these conmen.
The underlining fact of these events is that many professional experts including Chartered Accountants, Company Secretaries and lawyers are being engaged in such activities.
Doing business with any of the GST defaulters is always going to harm your firm too.
So you must always verify the business entity you are getting in business with.
In this short article, we will see some of the instances of such frauds and how you can save yourself and the business from such malpractices.
Importance of Input Tax Credit
Input Tax Credit is the most lucrative feature of the GST structure. However, it is complicated at the same time.
Let me discuss this with an example:
Consider 3 entities:
Fun Traders (Wholesale Supplier)
| Factor | Amount |
| Supplies Goods to Ajay Bhai | Rs.1,00,000 (Received) |
| Collects GST (18%) | Rs.18,000 (Received) |
| Total invoice value | Rs.1,18,000 (Received) |
| Total Ta collected from Ajay Bhai | Rs.18,000 |
| Total Tax Paid to Government | Rs.18,000 |
| Direct incidence of tax | Nil (paid as received from retailer) |
While on Retailer’s Side:
The retailer sells goods further to the consumer.
Ajay Bhai (Retailer)
| Factor | Amount |
| Value of Goods (With Profit included) | Rs.1,20,000 |
| Collects GST (18%) | Rs.21,600 |
| Total invoice value | Rs.1,41,600 |
| Total Tax collected from Consumer | Rs.21,600 |
| Tax Paid to Fun Traders | Rs.18,000 |
| Tax Paid to the Government | Rs.3,600 |
| Direct incidence of tax | Rs.3,600 |
Now, let us see the impact of this chain on the consumer:
Common Man ( Consumer )
| Factor | Amount |
| Value of goods (paid to the retailer) | Rs.1,20,000 |
| GST Paid (18%) | Rs.21,600 |
| Total invoice value | Rs.1,41,600 |
| Total Tax paid to the retailer | Rs.21,600 |
| Direct incidence of tax | Rs.21,600 |
From this example, we understand that,
This is how the whole chain of the Input Tax Credit under GST functions.
Now, it is evident that the chain of how ITC functions are interlinked, and failure or mismatch from either supplier’s or retailer’s side can cause a blockage of the cash flow.
Hence, the ITC holds high importance when it comes to the smooth cash flow in the GST structure.
Factors that can block your ITC & lead to ITC Frauds
Following listed are some of the most prominent reasons which may lead to blocking of your Input Tax Credit:
Any of the above-mentioned reasons can cause blocking of your ITC and will be considered as an Input Tax Credit or GST fraud.
Measures you can take to stop your ITC from getting blocked
There are some very easy steps any taxpayer can take to keep the Input Tax Credit complications in check.
We list some of the major points which you must remember for a smooth Input Tax Credit chain of cash flow:
Verify your supplier–
Identify GST defaulting Suppliers
Notifying GST defaulting Suppliers
As this may be a case of an error, you should immediately inform the concerned supplier about this discrepancy and ask him to rectify it.
If this, error is not corrected before the due date; your Input Tax Credit will get affected.
NOTE: Currently, a taxpayer can avail of 5% excess/provisional ITC of the total eligible ITC.
If your supplier is NOT filing the outward sales details on-purpose, then this can be a major ITC fraud.
Hence, you should have a habit of reconciliation of your Purchase data against the GSTR-2A (which is based on your Seller’s GSTR-1 records).
Important Update-Budget 2021:
According to the recent addition of Clause (aa) in the Sub-section (2) of Section 16 of the CGST Act,
From this update, it is now clear that the Supplier has to now furnish the invoice or debit note in his outward supplies and the same should be communicated with the recipient.
This provision will help in regularizing the cash flow in the ITC chain, however, failure to do so may cause the ITC blocking of the recipient.
Hence, it’s an obligation on the supplier’s part to furnish his outward supplies data in his GSTR-1.
Implications of GST or ITC Frauds
As discussed in the above segments, it is evident that your ITC stands blocked if you are involved in the ineligible availing of Input Tax Credit.
Moreover, other serious implications can affect your business and you as a citizen.
Consistent efforts are being taken to sanitize the taxation system. However, there are cases of tax evasion, ITC frauds, and tax leakages being reported frequently.
It is important that an honest taxpayer stays away from such fraudulent activities and avoid further complications in the business.
To conclude
As far as the ITC frauds are concerned, the taxpayer needs to take some preventive measures to stop him from getting into these ITC frauds.
ITC reconciliation also plays an important part in spotting the defaulting suppliers and thus, it is advised that every taxpayer should use the ITC Reconciliation tools which can safeguard you from the malpractices as well as comply with all the rules of the GST which keep on changing.
Honesty pays and it pays well.
So it’s our humble request to all the taxpayers to refrain from such activities and make our taxation system more transparent and stronger than ever!
Stay tuned for more such informative articles like this “Input Tax Credit Frauds: Challenges in 2021”
Until the next time…
About the Author– GSTHero– Making GST Simple! GSTHero is the best GST filing, e-Way Bill Generation & E Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1 Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.
GSTHero ERP Plugins provide 1 Click e-Way Bill & E-Invoice, Generation, Operation & Printing from your own ERP like Tally, SAP, Marg, Busy, Microsoft Dynamics, Oracle & others itself with high data security
Thanks for Reading Our Article on “Input Tax Credit Frauds: Challenges in 2021”
You May Also Like: Expenses Incurred for Corporate Social Responsibility (CSR) are Eligible for Claiming ITC in GST: AAR Uttar Pradesh
E-Invoicing Under GST: Applicability of E-Invoicing
What documents are presently covered under e-invoicing?
Following documents are presently covered under e-invoicing:
issued by the notified class of taxpayers.
Though different documents are covered, but for easy reference and easy understanding, the system is referred as “e-invoicing”.
What supplies are presently covered under e-invoicing?
Following supplies are presently covered under e-invoicing:
made by the notified class of taxpayers.
Business to Consumer (B2C) supplies can also be reported by notified persons?
No. This will be brought under e-invoicing in the next phase.
Is e-invoicing applicable for Nil-Rated or Wholly Exempted supplies?
No. Because in these cases, a bill of supply is issued and not a tax invoice.
Doubts are raised by some professionals that is e-invoicing applicable on export of exempted goods? The answer is Yes.
Whether the financial/ commercial credit notes also need to be reported to IRP?
No. Only credit/ debit notes issued under section 34 of the CGST/ SGST Act need to be reported to IRP.
Can you give some illustrations on applicability of e-invoicing on the basis of turnover threshold?
Yes. The illustrations are as under:-
Illustration-1:
| Financial Year | Turnover (in crores) | Applicable from which year? |
| 2017-18 | 700 | No |
| 2018-19 | 420 | No |
| 2019-20 | 250 | No |
| 2020-21 | 450 | Yes [w.e.f. 01/10/2020] * |
| 2021-22 | 100 | Yes |
*As in F.Y. 2017-18, turnover is more than Rs. 500 Crores, so applicable from 01/10/2020.
Illustration-2:
| Financial Year | Turnover (in crores) | Applicable from which year? |
| 2017-18 | 88 | No |
| 2018-19 | 67 | No |
| 2019-20 | 79 | No |
| 2020-21 | 580 | No* |
| 2021-22 | 50 | Yes [w.e.f. 01/04/2021] |
*As in Previous F.Ys. (up-to F.Y. 2019-20), turnover was less than Rs. 100/ 500 Crores, so not applicable from 01/10/2020 or 01/01/2021.
Illustration-3:
| Financial Year | Turnover (in crores) | Applicable from which year? |
| 2017-18 | 165 | No |
| 2018-19 | 260 | No |
| 2019-20 | 105 | No |
| 2020-21 | 126 | Yes [w.e.f. 01/01/2021]* |
| 2021-22 | 70 | Yes |
*As in Previous F.Ys. (up-to F.Y. 2019-20), turnover was more than Rs. 100 Crores but less than Rs. 500 Crores, so applicable from 01/01/2021.
Illustration-4:
| Financial Year | Turnover (in crores) | Applicable from which year? |
| 2017-18 | 85 | No |
| 2018-19 | 97 | No |
| 2019-20 | 99 | No |
| 2020-21 | 125 | No |
| 2021-22 | 68 | Yes [w.e.f. 01/04/2021] * |
*As in Previous F.Y. 2020-21, turnover was more than Rs. 100 Crore, so applicable from 01/04/2021.
Whether e-invoicing applicable to supplies made by notified persons to Govt. Departments?
Whether e-invoicing applicable for invoices between two GSTINs but under same PAN?
Yes. Because different GSTINs under same PAN are treated as “Distinct Persons” as per section 25(4) of the CGST/ SGST Act, 2017.
Whether e-invoicing applicable for Imports?
No. E-invoicing is not applicable for Import Bill of Entry.
Which entities/ sectors are exempted from e-invoicing?
Whether SEZ developers need to issue e-invoice?
Yes, if they have the specified turnover and fulfilling other conditions of the notification.
In terms of Notification No. 61/2020- Central Tax Dated 30/07/2020, only SEZ Units are exempted from issuing e-invoices.
To Read my Presentation on E-Invoicing: Part-1, Please Click Here
Next part to be launched soon. For any query, please email me at dhanraj@taxconcept.net
What is E-Invoicing?
As per Rule 48(4) of the CGST Rules, 2017, notified class of registered persons (as notified by issuing notifications from time to time) have to prepare invoice by uploading specified particulars of invoice in Form GST INV-01 on Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN).
How is E-Invoicing is different than present system?
There is no significant difference between the two.
Registered persons will continue to create their GST invoices from their own software. However, they will be required to follow a process through Invoice Registration Portal which is as follows:
The invoices will be reported to Invoice Registration Portal (IRP)
On IRP, the invoice shall be digitally signed and the registered person shall add a QR code to the invoice. After this, IRP returns the e-invoice with a unique Invoice Reference Number (IRN).
Now, the invoice can be issued to the receiver (along-with QR Code).
Note: A GST invoice will be valid only with a valid IRN in this case.
You can understand the process through image as attached below:
What are the legal provisions governing e-invoice?
Notification No. 68/2019- Central Tax Dated 13/12/2019:
Notified Central Goods and Services Tax (Eighth Amendment) Rules.
Inserted new sub-rules in Rule 48 of the CGST Rules:
(4) The invoice shall be prepared by such class of registered persons as may be notified by the Government, on the recommendations of the Council, by including such particulars contained in FORM GST INV-01 after obtaining an Invoice Reference Number by uploading information contained therein on the Common Goods and Services Tax Electronic Portal in such manner and subject to such conditions and restrictions as may be specified in the notification.
(5) Every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified in the said sub-rule shall not be treated as an invoice.
(6) The provisions of sub-rules (1) and (2) shall not apply to an invoice prepared in the manner specified in sub-rule (4).
Notification No. 69/2019- Central Tax Dated 13/12/2019:
Notified 10 Common Goods and Services Tax Electronic Portals for the purpose of preparation of invoice in terms of rule 48 (4).
Notification No. 70/2019- Central Tax Dated 13/12/2019:
Notified registered persons whose aggregate turnover in a financial year exceeds Rs. 100 crore, as a class of registered person who shall prepare invoice in terms of Rule 48(4) of the CGST Rules.
Notification to come into force from 01/04/2020.
(This notification superseded by Notification No. 13/2020- Central Tax Dated 21/03/2020.)
Notification No. 02/2020- Central Tax Dated 01/01/2020:
Substituted Form GST INV-1 as e-invoice schema.
(Schema further amended vide Notification No. 60/2020- Central Tax Dated 30/07/2020.)
Notification No. 13/2020 Central Tax Dated 21/03/2020:
Superseded Notification No. 70/2019- Central Tax Dated 13/12/2019.
Notification to come into force from 01/10/2020.
(This notification amended by Notification No. 61/2020- Central Tax Dated 30/07/2020, Notification No. 88/2020- Central Tax Dated 10/11/2020 and Notification No. 05/2021- Central Tax Dated 08/03/2021.)
Notification No. 60/2020- Central Tax Dated 30/07/2020:
Notified Central Goods and Services Tax (Ninth Amendment) Rules, 2020.
Notified revised schema for Form GST INV-1.
Notification No. 61/2020- Central Tax Dated 30/07/2020:
Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.
Special Economic Zone (SEZ) Units also excluded from e-invoicing mandate.
Aggregate turnover required for e-invoice enhanced from Rs. 100 to Rs. 500 crore.
Notification No. 70/2020- Central Tax Dated 30/09/2020:
The words “a financial year” in Notification No. 13/2020- Central Tax Dated 21/03/2020 substituted with “any preceding financial year from 2017-18 onwards.”
Invoices for exports also included in e-invoicing mandate.
Notification No. 72/2020- Central Tax Dated 30/09/2020:
Inserted Clause (r) in Rule 46 of the CGST Rules:
(r) Quick Reference (QR) Code, having embedded Invoice Reference
Number (IRN) in it, in case invoice has been issued in the manner prescribed
under sub-rule (4) of rule 48.
Proviso inserted in rule 48(4) of the CGST Rules:
Provided that the Commissioner may, on the recommendations of the
Council, by notification, exempt a person or a class of registered persons
from issuance of invoice under this sub rule for a specified period, subject to
such conditions and restrictions as may be specified in the said notification.
Rule 138A(2) substituted:
(2) In case, invoice is issued in the manner prescribed under sub rule (4) of rule 48, the Quick Reference (QR) Code having an embedded Invoice Reference Number (IRN) in it, may be produced electronically, for verification by the proper officer in lieu of the physical copy of such tax invoice.
Notification No. 88/2020- Central Tax Dated 10/11/2020:
Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.
Aggregate turnover required for e-invoice reduced from Rs. 500 to Rs. 100
crore.
Notification to come into force from 01/01/2021.
Notification No. 05/2021- Central Tax Dated 08/03/2021:
Amended Notification No. 13/2020- Central Tax Dated 21/03/2020.
Aggregate turnover required for e-invoice reduced from Rs. 100 to Rs. 50
crore.
Notification to come into force from 01/04/2021.
What are the advantages of e-invoice for businesses?
E-invoice has many advantages for businesses such as Auto-reporting of invoices into GST return, auto-generation of e-way bill (where required).
e-invoicing will also facilitate standardisation and inter-operability leading to reduction of disputes among transacting parties, improve payment cycles, reduction of processing costs and thereby greatly improving overall business efficiency.
What businesses need to do?
Businesses will continue to issue invoices as they are doing now. Necessary changes on account of e-invoicing requirement (i.e. to enable reporting of invoices to IRP and obtain IRN), will be made by ERP/ Accounting and Billing Software providers in their respective software. They need to get the updated version having this facility.
The Government had earlier mandated e-invoicing for the taxpayers with aggregate turnover exceeding Rs. 500 Cr. from 1st Oct., 2020 and for taxpayers with aggregate turnover exceeding Rs. 100 Cr. from 1st Jan., 2021. From 1st April, 2021, Government has mandated e-invoicing for taxpayers with aggregate turnover exceeding Rs. 50 Cr. (in any preceding financial year from 2017-18 onwards).
In this regard, GSTN is holding a webinar as per details given below.
| GSTN Webinar on e-invoicing for Taxpayers | |
| Date of Webinar: | 17th March, 2021 (Wednesday) |
| Time of webinar: | 4.00 PM to 6.00 PM |
| Speakers: | Officers from GSTN & NIC |
| Target audience: | Taxpayers, especially those going to start e-invoicing from 01.04.2021 onwards |
| Language: | English |
| Link for livestream on YouTube | https://youtu.be/Tqdpma_xikA |
| To go through FAQs on e-invoice, click on | https://www.gstn.org.in/einvoice-faqs |
During the session, viewers can post their Queries in LiveChat / Comments section. The queries will be answered by the Panel towards the end of the session.
Recording of the session will also be available on GSTNs dedicated YouTube channel, at https://youtu.be/Tqdpma_xikA, for viewing later on.
The taxpayers are requested to join the session to benefit from the same.
E-Invoice Mandatory for Registered Persons Having Aggregate Turnover of More Than Rs. 50 Crore
Vide Notification No. 05/2021- Central Tax Dated 08.03.2021, the CBIC has reduced turnover eligibility for E-invoice from Rs. 100 Crore to Rs. 50 Crore. The new provisions will be in force from 1st April, 2021.
The copy of Notification is attached below:
GST E-Invoice Update: NIC Issues List of Businesses to which E-Invoice is Mandatory
E-Invoicing has been implemented since October 2020 & it has been receiving a positive response from the taxpayers.
There have been certain revisions to the eligibility criteria of the businesses to be mandated to enroll for the e-Invoicing system, since the inception of this system.
In this article, we will be discussing a very recent update on the e-Invoice front regarding the list of the businesses released to be mandatorily registered under GST.
About the e-Invoice generation update
The National Informatics Centre (NIC) has issued a list on its e-Invoice portal on January 27th, 2021.
This list consists of the details of the businesses for which e-invoice generation is made mandatory. The list shows about 70,000+ businesses for which e-Invoicing is made mandatory.
It will now be mandatory for these listed businesses to upload their invoice details to the Invoice Registration Portal (IRP) either directly or through a third-party service provider (any e-Invoicing software).
You can find out this recently released list here.
What is e-Invoicing under GST?
The e-Invoicing system is a recent addition to the GST structure. Since the introduction of this system, it has been popular in a short time and is being considered as a positive step as per the taxpayers.
e-Invoice generation under GST is a simple activity in which the eligible businesses have to upload their transaction invoices on a dedicated Government portal called Invoice registration Portal (IRP).
IRP then authenticates these invoices & returns you an authenticated copy with a unique Invoice Reference Number (IRN) and a QR Code.
This newly generated copy with an IRN and a QR Code is called an e-Invoice.
Why is e-Invoice Generation Important?
Let me give you a simple analogy.
There are some bad fishes along with many other good fishes in the pond.
There are many instances when the acts of these few bad fishes will negatively impact the good fishes & their activities.
The same goes with the GST structure (pond) 7 the taxpayers (good/bad fishes).
e-Invoicing shall:
These are some of the important malpractices that will be brought under the radar with e-Invoicing being implemented.
Currently, the businesses whose annual aggregate turnover exceeds 500 Crore are mandated to follow the e-Invoicing system.
But, according to a recent update, e-Invoice generation may be made mandatory for businesses falling under the umbrella of 50- 100 Crore.
We can predict this based on the recently enabled sandbox testing facility by the Government of India & GST Portal. This testing is made available for the e-Invoice generation of the businesses who fall under the bracket of 50-100 Crore of aggregate turnover.
How will my Business Benefit from e-Invoicing?
There are multiple perks taxpayers can enjoy whilst registered under E-Invoicing System
Here are some typical benefits, that e-Invoicing can provide you.
To Conclude
In this short article, we have introduced you to the recent update on e-Invoice regarding the list of the businesses for which e-Invoicing has been made mandatory.
We also explained some basic concepts & benefits of e-Invoicing.
Any common taxpayer trying to understand the e-Invoicing concept will surely benefit from this article.
To help you file e-Invoice in fully automated software & learn about Government-authorized GST Suvidha Providers, click here.
Until the next time…
About the Author– GSTHero– Making GST Simple! GSTHero is the best GST filing, e-Way Bill Generation & E Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1 Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.
GSTHero ERP Plugins provide 1 Click e-Way Bill & E-Invoice, Generation, Operation & Printing from your own ERP like Tally, SAP, Marg, Busy, Microsoft Dynamics, Oracle & others itself with high data security.
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e-Invoicing has implemented and is applicable to mostly B2B Invoices for large enterprises as of now.
However, e-Invoicing & reporting of documents, is not limited to B2B invoices but is also applicable to documents like B2G Invoices, Export invoices, RCM Invoices, Credit Notes & Debit Notes.
Soon e-Invoicing will also cover the reporting of B2C Invoices to the IRP as well.
In this article we have explained the working of e-Invoices on Reverse Charge Transactions where the recipient of goods is liable to pay the taxes directly to the Government.
How & who is required to generate e-Invoices and how will the entire e-Invoice compliance work for RCM transactions is what we have discussed in this article.
Towards the end of the article you will discover which is the best e invoicing software, so read till the end!
e-Invoicing or Electronic Invoicing under rule 48 of the CGST Act is an electronic method of generating & operating B2B invoices& other relevant documents.
e-Invoicing under GSTis applicable to all businesses having an annual aggregated turnover of INR 500 Crores & above for now but will soon apply to all the businesses as per the Government’s plan & notifications that have rolled out indicating the same.
Under e-Invoicing, businesses are required to generate their invoices in the specified SCHEMA Format through their ERPs & upload them on the IRP for validation.
The IRP will validate the e-Invoices for errors & duplications of any sort & will revert an error file incase of errors.
However, upon successful validation, the IRP will generate a unique IRN & QR Code for the e-Invoice that will be used as its identity.
The user can then download the e-Invoice from their & put it to further use. This process must happen in real-time that is, on or before the actual time of the transaction.
The IRP will also share the e-Invoice data with the e-Way Bill & the GST Portal, as well as with the recipient of the e-Invoice in real-time, reducing a lot of your work.
A walk through the Reverse Charge Mechanism Lane
Reverse Charge Mechanism or RCM is not a new term in GST.
It may not be new but RCM still remains to be one of the most complex yet essential branches of GST.
So let us take a quick a shot walk through Reverse Charge Mechanism under GST.
Reverse Charge Mechanism is a mechanism that has been put in place to deal with special cases where the supplier of the goods is a non-registered person.
A non-registered person does not file his GST returns & thus cannot release the tax liabilities, in this case the responsibility shifts to the recipient of the goods, who must be a registered person under GST.
The supplier will generate a bill of supply &will collect the payment amount exclusive of GST from the recipient.
The recipient will then have to generate self-invoices & release the (GST) taxes on behalf of the supplier under Reverse Charge Mechanism, directly to the Government via form GSTR-1 & GSTR-3B.
Although, RCM is also applicable on certain goods & services that are specified by the Government. Click here to know everything about RCM & its applicability.
Note- The recipient of the goods is eligible to claim the ITC on RCM transactions, through form GSTR-3B.
Note- You cannot utilize ITC to pay the taxes under RCM, you will have to pay the taxes through the Cash ledger & later you can claim the ITC on the same.
Reverse Charge Mechanism & e-Invoicing
e-Invoicing will apply to transactions that fall under Reverse Charge Mechanism under GST.
The supplier of the goods & services will be required to generate the IRN for the invoices.
But how is the same possible when the supplier is an unregistered person?
Here is the drill, RCM is not only applicable to the case where the supplier is an unregistered person, it applies to other cases as well. Let us see what these are-
The applicability of e-Invoicing to these three cases is different, here is a breakdown of the application of e-Invoicing on the cases-
There are mandatory & optional field in the schema for declaring the RCM invoice details & to generate an RCM e-Invoice, click here to see the SCHEMA Format.
We hope the article helped you understand the applicability of e-Invoicing on RCM invoices.
The provision is a bit complex but the same has been mandated by the government & all businesses must understand & comply with the same.
So, we know that e-Invoicing compliance is of high priority for all businesses that are liable to it irrespective of its impact as it is mandatory, but is also complex.
It can sometimes be a little bit difficult than it seems considering the complex SCHEMA Format, Real-time Validation, Bulk operations & more.
The Government also recommends the use of external e-Invoicing solution such as GSPs to comply better with e-Invoicing, one such GSP is GSTHero which is also the best e-Invoicing Solution in the market currently.
GSTHero makes e-Invoicing simple to understand & operate with its user-friendly features & prominent support.
So why GSTHero?
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